A recent report by the Competition and Markets Authority has delivered its findings on the challenges that are limiting competition in the energy market. The report highlighted concerns that many customers have not considered changing over their energy supplier and this could be costing them over £100 every year.
It was found that the far too many consumers were paying too much for their energy bills and it is thought that one of the reasons customers do not switch over is due to the fact that they find billing difficult to understand; regulators have introduced a four tariff system to try and make billing clearer, however, the report concluded it had not been as successful as hoped.
Moreover, the report revealed that a lot of customers were reluctant to change over suppliers because they were concerned over the complexity of the process and they were unaware of what deals were available to them.
Roger Witcomb, who chaired the investigation, said:
“Whilst competition is delivering benefits to increasing numbers of customers, mainly through the growth of smaller suppliers with cheaper fixed-price deals, the majority of us are still on more expensive default tariffs. Many customers do not shop around to see if there’s a better deal out there – let alone switch. The confusing way energy is measured and billed can make comparing deals understandably daunting”.
Mr Witcomb also noted the high level of customer complaints about companies in the Energy sector.
Concerns over industry transparency
Another issue addressed in the report was concerns over the lack of transparency in the energy industry and the distrust that this can cause among consumers.
CMA Referral and Report
The energy industry was referred to the Competition and Markets Authority in 2014 with the aim of establishing whether or not competition in the energy sector was working well for customers. It was also hoped that an investigation would help to make the energy market clearer for consumers to understand, and that this would result in a greater level of fairness for customers.
As a result of the report, a number of possible remedies have now been drawn up; a final report is due to be issued by the Competition and Markets Authority by the end of 2015.
Companies have been invited to submit their comments regarding the authority’s initial findings and these can be submitted until the end of July 2015.